tv NBC Bay Area News Special NBC August 23, 2014 6:30pm-7:01pm PDT
risk on the road. is this an appropriate use of tax dollars? >> it is an appropriate, public/private partnership. >> it's using taxpayer funds for a private organization. >> a proposal to use bay area tax dollars for a clubhouse. we investigate why a small-town debate raises bigger questions about oversight and accountability. please don't push me. excuse me! [ bleep ] you. >> what do you say to the people who want to know where their money is? >> plus, this man, once prominent on the sheriff's advisory board now accused of stealing more than $1 million from investors. why he's now doing time after we investigated. here's chief investigative reporter tony kovaleski. >> thank you for joining us.
for the next 30 minutes, we investigate. it's asking tough questions, uncovering government waste and holding those in power accountable. we begin with the safety of public transportation. in the south bay, it's a popular choice for commuters and a new choice in getting to levi's stadium. tonight, questions about the literail system paid by taxpayers and run by the valley transportation authority. we dug into inspection records and uncovered safety returns. vicky nguyen found faulty wheels, potential for head-on collisions and other issues that records show the vta has been slow to fix. >> reporter: vta trains travel at a top speed of 55 miles an hour, carrying 34,000 riders a day. and sharing the roads with thousands of cars. a vta insider with knowledge of how these trains are maintained
and operated asked to be disguised for fear of being fired. is safety a priority at vta? >> only when they get caught by the state or federal government is it then a priority. >> reporter: the investigative unit obtained these state inspection reports that reveal vta has failed to properly maintain critical signals and many of its trains. the reports detail safety hazards that could lead to derailment and trains colliding head-on. in a report summary from february 2013, inspectors wrote, vta has knowingly and willfully violated safety procedures and cpuc regulations and vta does not have the capability to repair and maintain safe vehicles. records show in one unannounced visit that month, state inspectors found multiple wheel defects and warn-out tread on four different trains. what kind of safety risk does that pose to people riding these trains or operating these
trains? >> it's a risk of derailment. >> reporter: when you're cpuc inspectors found these problems, what did they instruct vta to do? >> not run those vehicles. and we found that they did run them after that. >> reporter: as recently at last month, vta was still sending out trains with condemned wheels. was vta at any time operating trains with defective wheels? >> no. >> reporter: michael hirsh is in charge of operations at vta and says he didn't know vta was running trains on wheels that didn't meet safety standards until we showed him the inspection report. >> this report says that one of the vehicles they inspected departed for service with condemned wheels, i'm not aware of that. >> reporter: did vta have multiple incidents last year
where trains were headed toward each other on the same track? >> no except that i will tell you that we operate single-track sections. so there are places where trains will have to wait for a train to go in the opposite direction, if that makes sense. >> reporter: cpuc said on multiple occasions there were concerns about signals being crossed and those trains potentially colliding head-on. are you saying that's not true? >> the cpuc may have that concern. we do not have that concern. >> reporter: inspectors had that concern because of this -- multiple incidents in 2012 and 2013 where inspectors found problems with signals that were allowing trains to head toward each other on a single track in potential head-on collisions. >> there would be other places for the train to stop or where the train would be required to stop. >> reporter: should that happen at all ever, even if there are signals in between, should two trains be heading toward each other? >> no. >> reporter: the reports note various reasons for the failures
from defectiveness to deficiencies. in one instance, inspectors said they were very concerned the trains were both traveling at a high rate of speed, 55 miles an hour, and 45 miles an hour, toward each other before they stopped. it happened here. let's give you a better look from the sky. this is a 1 1/2-mile stretch of track that north and southbound trains have to share. if they continue traveling at those speeds, they would have collided in less than a minute. >> there has never been an incident where vta trains -- an accident where vta trains were in a head-on collision. >> it disturbs me he's minimizing the problem. they're just lucky. >> reporter: russell quinnby is a rail safety expert who spent 20 years as an inspector with the national transportation safety board. we asked him to review the state inspection report. >> it tells me that this maintenance problem has been going on for a long time. to the point you to where it's
going to take a major fix to come back up to speed and make sure the cars are up to standard. >> reporter: inspectors say they are now asking the state commission for the power to issue citations when transit agencies don't fix their safety violations. >> time has run out. they've had plenty of time to fix this. it hasn't gotten fixed. >> reporter: meanwhile, the vta's coo says the agency is working to fix the wheel issues. >> we have professional operators. i encourage everyone to ride vta. >> vta was running a little more than 50% of its existing trains earlier this summer. the agency now tells us it's added trains to its route but can't confirm just how many. also as early as next week, the cpuc will look at a plan that allows inspectors to issue citations when safety problems aren't fixed. coming up, we investigate trucks and drivers hauling fedex goods on fedex routes but not
you've probably seen them on the road, we're talking about fedex trucks. we've learned not all those trucks and drivers belong to fedex. instead, third-party contractors get paid to transport fedex goods on fedex routes. the corporation says it's vetting them, but investigative reporter elyse kirshner found out, that's not the case, potentially putting other drivers in danger. >> reporter: it begins here, a federal express distribution center in sacramento, a major hub in northern california where
hundreds of trucks come in and out every day. some with the recognizable purple and green logos plastered on the sides. others with names you've never heard of. it was a third-party contractor with a subsidiary of fedex ground. that's what this driver was doing on august 8th, 2011, after picking up packages from the distribution center just outside of sacramento, quintero failed to stop his 25,000-pound box truck for stalled traffic along interstate 5. he crashed into donald taylor's parents' car at around 70 miles an hour. >> their bodies were burned beyond recognition. >> reporter: the high school sweethearts were killed instantly before their vehicle burst into flames. the actions also killed a toddler, injured seven others and totaled six cars. >> there's a guy rolling out of the vehicle, just got out before
the whole car went up. >> reporter: the truck driver survived. according to this accident report, quintero had no valid license, let alone a credential license to deliver fedex packages and, t tiris didn't ha the accurate paperwork. quintero was found guilty of manslaughter and other charges. he was sentenced to 14 years in prison. but because quintero was considered an independent contractor for fedex smart post, not an employee, taylor says the corporation was not held responsible. >> fedex did not want to discuss the situation, didn't want to talk about it. >> reporter: we reached out to fedex to respond to the accident. we were told a freight forwarder, fedex smart post, contracts with third party vendors for transportation services who agree to maintain their own d.o.t. operating
authority and as a result are responsible for any claims related to their operations. meaning fedex had nothing to do with the tiris accident. >> they basically told us, not our problem, go away. >> reporter: fedex says it also makes sure the third-party contractors are operating legally. it uses a third-party software vendor to monitor the department of transportation website for operating authority, insurance and safety compliance. but, remember, tiris trucking did not have the required operating authority. and records show they also had safety violations against them before that deadly crash in 2011. even so, drivers continued transporting fedex goods. >> what has to happen, this strengthening of good, strong rules, effective enforcement, accountability by the companies that are operating the equipment and contracting for the services of these companies. >> reporter: ann farrow is the department head of the department of transportation safety administration. while some companies dodge federal oversight, the penalties are stiff when safety standards are poor.
>> the highest penalty is we shut them down. >> reporter: but we found another third-party contractor that appears to have slipped through the tracks. back at the distribution center, we spoke to this contracted driver who talked about transporting fedex goods. are you guys only fedex or -- >> just fedex. we go everywhere. >> reporter: we looked up the department of transportation number on the side of the company's truck. we discovered they have no insurance. and in may, the government revoked their operating license. fedex told the investigative unit they stopped using that third-party contractor in june. we're finding out it lost its operating authority but over several days in july, we saw them transporting fedex goods in and out. do you think it's safe? >> yeah. >> anger. just flat-out pissed off. >> reporter: it's a business model that donald taylor allows fedex to distance themselves
when things go wrong. >> his route is only a fedex route. he doesn't do anything outside of federal express. therefore, they have and should have immediate control. >> a couple of notes for you, donald taylor decided not to sue fedex after his lawyer advised him that california law allows companies to hire third-party contractors. tiris trucking which only had a few employees, is no longer in business and finally the government tells us they are now looking into that third-party contractor we found operating without valid permits. when we return -- >> i just don't think that that's proper use of taxpayer funds. >> we investigate why these designs and $2 million don't necessarily add up. we dig into the debate over tax dollars, a private clubhouse and one bay area community.
private clubhouse. it's a proposal that sparked an intense debate in one bay area community. here's the idea and the conflict. use resident tax dollars for a facility that would be mostly off limited to many of those paying for it. it's a small-town story with some big implications for anyone living in a special tax district in california. steven stock investigates. >> reporter: take a look around. next to the recently renovated exclusive swimming pool, the sleepy hallow homes association clubhouse built in the 1950s is showing its age. >> it's in dire need of replacement. >> the facility needs to be replaced. >> something needs to be done. it's falling apart. >> reporter: while all these people agree this clubhouse needs replacing, they disagree about how to pay for it. >> i just don't think that's proper use of taxpayer funds. >> reporter: the
>> these tax dollars are going to build an emergency facility. >> reporter: the 2,500 or so residents in the district pay 17% of their base property tax to cover fire and emergency services. the fire district's three-member board is now considering using $2 million of its tax reserves to help build a new, already planned $2.5 million clubhouse to replace the old one. but while everybody has to pay the fire tax, not everyone is a member of the homes association. and that means they don't have full access to the clubhouse or the pool. >> private citizens, we've raised about $500,000. >> reporter: john grubbs serves as chairman of the sleepy hallow charitable foundation, overseeing the construction of the new facility. >> that's going to be matched with the $2 million from the fire protection district. >> reporter: how critical is the $2 million to your project? >> it's very critical. >> reporter: so critical that the charitable foundation's
website, tracking donations has already assumed it's getting the $2 million funding. even though it hasn't been approved yet. >> i just think that the money could be better spent. >> reporter: and that's the rub for residents like john who lives across the street. john does not pay to be a member of the homes association or the pool, yet his tax dollars would go to rebuild the new facility if district officials approve the deal. >> it's taxpayer funds and it should be used for taxpayer purposes, not for building somebody's dream clubhouse. >> i think it's a misuse of the taxpayer dollars. >> reporter: neighbor eric has lived in sleepy hallow all his life. he's a dues-paying member of the homeowners association and the pool. >> there are better ways to utilize that money than putting it into a structure that's not going to be used for the fire district. >> reporter: fire district officials call this project, quote, an emergency shelter. they point to these plan pages showing possible emergency uses, including a permanent fire
district office there. >> what your tax dollars are going for which you have complete use of as a member of the public are the public safety attributes of this building. >> reporter: all three board members are also members of the homes association. >> this facility would be available for any public safety purposes to anybody who wants to come to it for free. >> reporter: there are people who aren't members who pay taxes to your tax district, right? >> right. >> reporter: why is it appropriate for them to use your tax dollars to rebuild this clubhouse? >> we're not building a clubhouse. >> reporter: but take a look at this. the official plans on marin county's website call it a clubhouse and a community center, not an emergency center. the plans show an elaborate layout, including a library, a coffee bar, a wraparound porch, even a recreational court, apars of the building off limits to a
non-dues-paying member. >> it's an appropriate public/private partnership to improve the safety for all the residents, all the members of the fire protection district -- >> it's very difficult to distinguish cleanly between private purposes and public purposes. >> reporter: dave teaches tax law at uc berkeley. he estimates there are as many as 5,000 special tax districts like this in california. and there is very little oversight. >> these districts don't answer to the governor or to anybody else in the state directly. >> it's using taxpayer funds for a private organization. >> reporter: some residents maintain even if the new building serves emergency functions once in a while, that's not enough to merit their tax dollars footing 80% of the construction bill. >> there are better ways to use that money to better serve all the residents. >> reporter: by the way, the
fire district board already paid $25,000 for an architect to draw up those plans. the fire district had another meeting earlier this month but made no progress. and experts say voters only have a few recourses in a special tax district. they can organize a recall election or file a lawsuit in court. up next -- >> will you explain -- sir, please stay away from him. please don't touch the camera. >> results from the investigative unit. why this man accused of stealing millions in a ponzi scheme is now behind bars. after we investigated. stay with us. ♪
the d.a. says he swindled money all part of a ponzi scheme. a few weeks ago, ron battistella entered a no contest plea on nine felony charges connected to $1.3 million of missing money he took from bay area investors. we're just overwhelmed with hearing that justice is finally going to be done. >> reporter: she's one of nearly two dozen victims. she asked us to hide her identity. she's reacting to ron battistella's decision. he's essentially entered a guilty plea. he's going to prison for what he did. your reaction? >> very stunned. >> reporter: battistella told the judge he was responsible for nine felony crimes stemming from $1.3 million in investor money that disappeared. >> the defendant was running a ponzi scheme, essentially. he was lying to investors.
>> reporter: back in 2012, our investigation pointed a bright light on battistella's business dealings, investments that started with ads like this one in several bay area newspapers. promising a 10% return on investments into his car dealership. mr. battistella, tony kovaleski, nbc bay area. or collecting $1.3 million from bay area investors, he stopped making interest payments. and he didn't want to answer our questions about their money. will you explain -- will you explain -- sir, please stay away from him. please don't touch the camera. >> get out of here. >> reporter: excuse me? >> [ bleep ] you. >> reporter: mr. battistella, what do you say to the people who want to know where their money is? why do you think he entered the guilty plea? >> you can't defend him. there's a level of satisfaction when a person comes into a courtroom and admits what they did. however, i won't be satisfied
until heone of those victims ge every dollar that they've lost in this scam. >> reporter: satisfaction? >> there can never be any satisfaction in a situation like this. it's just been heartbreaking. i think he probably thought that he was invincible. >> by entering the plea and not taking it to trial, battistella now faces about four to five years in the state prison. on the phone, his attorney said he will not have a comment until after the sentencing that's now scheduled for september 5th. if you see something wrong and want us to investigate, this is your invitation to call our tip line at 888-996-tips. or send us an e-mail. we thank you for watching. if you like investigative journalism, please join us regularly right here on nbc bay area. why? well, some report, west virginia. i'm tony kovaleski. good night.
by now i don't. >> he plans on giving me some more present probably like one a day for the next three years. >>reporter: happy pair before the rumor began. nick reportedly confirmed today they have been living in separate houses for few months. the he has been rat vow renewal is the blame. last year neck and mariah shut down disneyland for the april 30 anniversary. mariah posted vine video of elaborate fairy tale like renewal ceremony with prince and princess outfit and karen complete with twins and little rock and row but this april they only posted low key instagram photo of them posing privately as family. marriage trouble rumor quickly followed. >> it's honest and it's real and it's not about everybody having their opinion. >>reporter: very private beyonce and jay-z celebrated fourth wedding an versus any 2 2012 with vow renewalé ceremony. now the rumorhe